Gas Glut Shakes Up U.S. Industry

Energy , Natural Gas Apr 11, 2012 No Comments

Natural gas surplusThe natural-gas surplus has implications for a variety of industries. Energy companies that produce gas are seeing revenue shrink and are searching for more lucrative oil. Cheap gas is stealing power-generation markets from coal, spreading gloom across a mining industry that is being spurned by its most important customer.

Railroads, whose single largest source of revenue is typically hauling coal, are hurting. The economics of building a nuclear plant, wind farm or solar-power installation look shakier than ever.

 Plummeting natural-gas prices are pushing U.S. industries into virgin terrain, even beginning to dislodge cheap Western coal from its once-untouchable perch as the nation’s favorite fuel for power production.

On Tuesday, natural-gas futures settled at $2.03 per million British thermal units—just a hint above $2, the lowest price since January 2002.

The shock wave for industry could intensify this summer because the U.S. is running out of room to store the glut of natural gas, which could drive gas prices down to sustained lows not seen in decades.

via Gas Glut Rejiggers Industry – WSJ.com.

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Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.

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